Meta Platforms Inc. reported a stronger-than-anticipated earnings performance, sending its shares sharply higher in after-hours trading. The company exceeded Wall Street estimates on both revenue and profit, reinforcing confidence in its core advertising business and long-term technology investments.
Advertising Revenue Shows Strong Momentum
Advertising remained Meta’s biggest growth driver, supported by improved targeting tools and higher engagement across Facebook, Instagram, and WhatsApp. The company highlighted steady growth from small and medium-sized businesses, along with increasing demand for video and short-form ad formats.
AI Investments Begin to Pay Off
Executives pointed to artificial intelligence as a key factor behind rising ad efficiency and user engagement. Meta’s AI-powered recommendation systems have improved content discovery, while generative AI tools for advertisers are helping brands create campaigns more quickly and effectively.
Reality Labs Losses Narrow Slightly
While Meta’s Reality Labs division continued to post losses, the company indicated tighter cost controls and more focused product development. Management reaffirmed its long-term commitment to mixed reality and immersive technologies, positioning them as future growth pillars rather than near-term profit centers.
Cost Discipline Boosts Investor Confidence
Investors responded positively to Meta’s continued emphasis on efficiency. Lower operating expenses, disciplined hiring, and streamlined infrastructure spending helped lift margins, reinforcing the company’s post-2023 focus on sustainable profitability.
Market Reaction and Outlook
Meta shares jumped sharply following the earnings release as analysts welcomed the company’s improving financial discipline and clearer growth trajectory. Looking ahead, Meta expects continued advertising growth, deeper AI integration, and disciplined investment across its product ecosystem.